Zurich UK Life profits down despite sales surge

Zurich’s UK Life division saw operating profits slump 17 per cent in the first half of the year, despite sales volumes rising by over a third.

The insurer’s half year results, published this morning, reveal profits dropped from £66m last year to £55m this year.

“This is a healthy result given a large one off in the first half of 2014 and lower bond yields this year,” the firm says.

“Operating profit was driven by legacy book profits being combined with the increasing profits from our corporate and retail protection businesses which both grew strongly.”

Sales were up 35 per cent year-on-year, from £345m to £466m, with protection volumes increasing “significantly”.

The value of new business written was up 23 per cent to £64m, although new business margin fell 1.2 basis points to 13.7 per cent.

“This reflects the current mix of business characterised by higher volumes of lower margin savings business and steady volume growth across our higher margin protection business,” the firm says.

Zurich UK Life chief executive Gary Shaughnessy says: “These results not only demonstrate we are delivering on our strategy but show the breadth and diversity of our business, with robust sales and profits coming from across our retail, corporate and legacy business units. At the same time, we continue to invest in the growth of our retail and corporate savings businesses.

“In particular, our retail savings platform is maturing well, while our corporate protection business has also performed very strongly, growing in the group income protection market as well as continuing to increase our share of the group life market.”